Berlusconi turns to social partners as recession looms

Italian Premier Silvio Berlusconi invited unions and businesses yesterday to work with the government to jump-start Italy’s faltering economy after figures showed the country plunged into recession in the first quarter of the year.

Berlusconi told a press conference the economy required intervention by the government, but that European Union rules place strict limits on what he could do.

As a result, he said, he had asked unions as well as business representatives to meet with the government to make proposals together on next steps.

“At this time, we have decided to bring in the social parties and share a common responsibility,” he said.

His comments came a day after preliminary data from national statistics office Istat said gross domestic product in the euro zone’s third-largest economy shrank 0.5% in the first quarter of 2005 – against a forecast for 0.3% growth.

It was the worst showing since the final quarter of 1998.

Italy’s GDP shrank by 0.4% in the fourth quarter of 2004. Economies are defined as being in recession if they shrink for two consecutive quarters.

Berlusconi said he didn’t think Italy was in a full-blown recession, saying that the Istat figures instead made him ”fear a stagnation”.